Weak pc market puts the brakes on intel

Weak pc market puts the brakes on intel

Profits shrank by 14.3 percent to 2.97 billion dollars. In addition, with the imminent launch of the new microsoft operating system windows 8, intel ventured only a very cautious forecast for the current quarter.

Intel chief executive paul otellini explained the results as a result of a difficult economic environment, a reluctance to buy ahead of the launch of windows 8 and the popularity of smartphones and tablet computers. Production is to be trimmed in the final quarter, which will result in a write-down of around 500 million dollars, explained CFO stacy smith. "The caution throughout the supply chain is very rough. We can’t run our factories at full capacity," the head of intel germany, christian lamprechter, told dpa on wednesday.

Traditional chip manufacturers such as intel and its much smaller rival AMD are currently suffering from the weak PC market. Sales of notebooks and desktop computers plummeted by more than eight percent last quarter. Even the lightweight ultrabook laptops have not yet brought the hoped-for growth. At the same time, business is booming with smartphones and tablets, in which processors from intel and AMD are hardly ever used. The industry is hoping for the launch of the new microsoft operating system windows 8 at the end of october. Then more tablets with intel chips will also come to market. Intel is also making a new attempt to put its processors in smartphones.

Forecast for current fourth quarter cautious despite windows 8 hopes. Intel expects $13.6 billion in revenue – virtually the same as the previous quarter – with a range of $500 million more or less. The stock temporarily lost around 2.6 percent in early new york trading.

Intel still counting on the success of ultrabooks. Currently, there are about 140 models of the dark notebooks with intel chips in the pipeline, lamprechter said. With the motorola RAZR i, a smartphone with an intel chip is now also available in germany. Tablets with new windows software to follow. "We’ve always said it’s not going to be a 100-meter race, it’s going to be a marathon," the germany chief said, referring to intel’s previous weakness in smartphones and tablets. But in the meantime, he says, the chip giant is well positioned to benefit from future market growth.

"We knew that 2012 would be a difficult year," said lamprechter, referring in particular to the economic turbulence. Demand from growth markets such as china, which had previously helped the industry, had recently collapsed. But at the same time, intel is making progress in new areas such as automotive electronics and equipment for intelligently controlled power grids.

In the past quarter, sales of the PC chip division at intel fell by 8.3 percent to 8.63 billion dollars, almost in line with the market development, as the company announced after the US close of trading on tuesday. Its operating profit fell 16.9 percent to $3.34 billion. In the business with processors for data centers, there was a slight increase in sales with an almost unchanged operating result.